The Clunker Clunker

It’s time to once again draw a lesson from experience, something left-leaning politicians and their voters who put them in office have to learn over and over.

Take economic actions in a more efficient manner.

You always create problems when you meddle with the market economy. A perfect example was the cash for automobile clunkers program. All it did was rearrange orders that would have been done a few months later, leaving a drought of orders in its wake.

It disrupted the used car market by taking away entirely the supply of second-hand autos that only so many can afford to buy.

And the ill-conceived program cost the taxpayers dearly.

The Coming College Fiasco

The National Center for Education Statistics has found that most college graduates are below proficiency in their verbal and quantitative literacy. University of California professors Philip Babcock and Mindy Marks report that students now study an average of 14 hours a week, off from 24 hours in 1961.

The American Council of Alumni and Trustees surveyed 714 colleges and universities, and state " by and large, higher education has abandoned a coherent content-rich general education curriculum."

They are not taught the basics of literature, history or science. ACTA claims that most schools don't require a foreign language, and scarcely any require economics, American history and government "are badly neglected," and schools fail to "have much to do" on math and science.

ACTA has a website: www. whatwilltheylearn.com that gives details for each school, and tuition.

Incentives For Creating Jobs

Left-leaning politicians and their economic advisers have no idea how to create jobs. Their academic training, experience and inclination work against such effort.

Jobs as a rule do not come from the government creating a post in a government office, or handing out a pick, shovel or hammer for a construction project. They come from real work demand of consumers. When the demand is not there, the job can never be viable or stable.

Incentives in the form of one-time tax credits are not valid inducements. Politicians and economists who cannot even operate a pushcart never learn this. True incentives come from permanent tax cuts.

To assist job incentives, there must also be minimal fiddling, causing higher costs for employed workers, on wages, fringe allotments, or threats of additional business licensing fees. And no veiled or actual increased taxation on income.

Psychological disincentives always are the culprits in destroying real job formation, a fact left-leaning politicians and their economist advisers will never learn, or they will lose their credentials.

Where Are Real Jobs?

Know the difference between a government and a private job?

A private job has an economic purpose, so it is more stable. And is therefore more productive. Companies strive on reality, not political talk. Such as fantasy “shovel-ready” jobs we found never truly existed.

Government jobs are usually interim if they are used only to make work. They are more costly and less productive. They are often unionized, so have less consumer-interest. Union jobs are not necessarily priced for consumer preferences, but primarily accommodate labor interests.

You don’t build a productive society with government jobs. If you could, the Soviet Union would have been a great success. They had grandiose plans for workers and production goals. Eventually, their entire mirage ran out of fantasy and steam.

Global Warming Enforcement

Polls show the American public has overwhelmingly turned down global warming ideas. The science behind it is sketchy at best.

The public certainly wants little to do with the enormous taxes that will be imposed on everyone when further controls on energy are imposed.

The American public is against the imposition of heavy energy taxes to reduce ”global warming.” Yet, the Obama Administration has its Environmental Protection Agency come up with non-Congress-approved edicts that have burdened industry with massive, costly regulations, far beyond what the electorate would approve.

We now have a holy war waged against a new enemy, CO2 emissions. Just a few years ago, we were taught in school that CO2 gas that we expel with every breath, was food for our trees. We somehow cannot associate it with true toxic materials.

The government has simply come up with another means of imposing taxes within the global warming scenario.

ObamaCare and Big Business

Many big companies backed the Obama Administration’s efforts in health care. Because they believed such government action would actually make their financial burden easier if government took over its health care obligations. The ObamaCare bill proved them wrong. Many big companies are now looking to escape the bankrupting noose.

On the other hand, small business always knew they would be heavily taxed for heath care that they did not provide nor could afford.

This is bound to cost jobs which the Obama Administration promised the public with every speech.

Inasmuch as government bureaucrats could not operate a pushcart to make a living, they cannot envision how many jobs this can affect.

The Need For Medical Malpractice Tort Reform

The accounting firm PricewaterhouseCoopers says that about 10% of medical cost owes to medical malpractice lawsuits. About 2% is caused by direct lawsuit costs. Add to that about 5% to 9% because MDs have to practice defensive medicine. They add tests just in case a plaintiff asks in court why they didn’t have certain work performed.

The American College of Obstetricians and Gynecologists found in a study in 2003, that cerebral palsy could not be blamed in the vast majority of cases concerning baby delivery. Yet, it has resulted in enormous liability damage in lawsuits suffered by obstetricians and gynecologists.

The Los Angeles Times has reported that the most performed operation in America is the cesarean section. This procedure is now done in 31% of births, up from 4.5% in 1965.The increase is because of lawsuits.

The New York Times has reported that such lawsuits have influenced doctors into changing the way they deliver babies, calling for an immediate cesarean when seeing only relatively minor fetal heart anomalies.

Just a sample of how ”thoughtful” politicians, intentionally avoiding tort reform, are able to influence our health and medical costs.

Wasted Stimulus Money

Instead of wasting money; throwing big sums on fantasy “shovel-ready” jobs, the Obama administration could have spent funds on re-training the almost permanent unemployed.

The extended unemployment insurance did no stimulation and has acted as a form of public assistance. It was never directed in a way to assist those who were unable to find jobs that were impossible to find. To instead help plan to get ones for which there were a demand.

President Obama has stated all the features of European planned economics he wants for the U.S. Somehow, their job-training features have eluded him.

College Graduate Debt

College graduates taking courses which lead to something as mundane as law, where a student can incur debts as high as $180,000. As I often point out: Up to World War II, you could take a Bar Exam in a tough licensing state as New York without going to college at all. Abe Lincoln and other lawyers of his veracity never went to college in order to practice. It is a profession studied by reading law, comments, and adjudications.

In fact, so many degrees given by colleges are for courses which can be learned in the library or over the Internet. These can be achieved far more cheaply than at formal institutions.

But without the on-campus social amenities.

The Unemployment Mess

America is suffering the largest employment drop since World War II. In 2007, about 63% of adult Americans had jobs. Now, only about 58% have jobs—a decline of nearly 5 percentage points.

Applied to the 230 million private civilian adults of working age, this decrease means we have nearly 12 million fewer jobs than we would have if the employment-to-population ratio were still at the 2007 level, at 63%. This is the worst job loss we have had in sixty years.

The Obama administration projects the unemployment rate will drop to 8.7 percent by the end of 2011 and 6.8 percent by 2013. That is not attainable. We would have to add nearly 300,000 jobs a month over the next three years, while many employers are wary of adding jobs without evidence that the economy won't take another downward turn.

At the rate we are adding jobs, it will take from six to nine years to climb out of this recession.

Private-sector employers are working temps and part-timers rather than hiring new employees. Many who have found full-time jobs are taking pay cuts. In addition, state and local governments are cutting jobs because of budget squeezes.

The real unemployment number is closer to 17%.

The Rare Earth Shortage

Rare earth minerals are exotic materials used in the production of sophisticated batteries, such as those in cars we are planning.

Unfortunately, those minerals are available chiefly from Inner Mongolia Autonomous Region, part of China.

Rare earth export is strictly controlled by China, which makes rare earth politically and economically-sensitive for the U.S. The use of the minerals on a large scale puts us at an immediate disadvantage.

We have a deposit in California but the environmentalists are naturally preventing its development.

The Impractical Alternative Fuel Industry

The alternative fuel industry, other than oil, gas and coal, is preferred by environmentalists, but is unrealistic and impractical.

Wind power is cheaper than solar power and it also takes less land. Yet, it still is subsidized and not comparable to what we get for our immediate needs at low cost, and without taxpayer help.

New solar thermal power, also not cost-competitive, requires lots of empty land that is not always available. It uses the sun as a means of heating water by turning turbines. Silicon-coated photovoltaic method is not as good.

The alternative fuel industry we hear so much about isn’t practical, in so many ways.

Real Unemployment Figures

Real unemployment is well above the government number at about 9.5 percent. One reason: Over 1.2 million people have given up hope of finding work and have left the labor force in recent months.

There are at over 14.5 million Americans searching for jobs: almost 1.5 million jobless for more than 99 weeks, and over 6.6 million jobless for over 27 weeks.

This is a far more serious statistic that what is routinely thrown at the public by Washington’s official bureaucracy.

Where Are Jobs?

We will need at least 5 million jobs to get back to an unemployment rate of under 4 percent, what we had when Democrats in Congress in the mid 2000s were complaining that unemployment of 4% reminded them of Herbert Hoover.

Remember: This is after all the bank bailouts and the shovel-ready jobs that were not exactly shovel-ready, and the ensuing trillions in budget deficits.

The most obvious problem we have is the lack of job growth. And the adverse condition most likely will get worse.

Conditions will get better when consumer and business psychology recovers. Translation: Lower taxes and less confusion from Washington.

Coming Medical Boards

The complex ObamaCare legislation is being slowly interpreted. It never was before passing Congress.

It may eventually require seniors to submit to a counseling session every few years. More often, if they become sick or have to go into a nursing home.

The proposed cost controls are similar in many ways to the British and Canadian systems. The purpose is to decide which treatments the patient should get, whether they should get them, and when they should be available.

Example: In 2006, a U.K. board said that elderly macular degeneration patients had to wait until they were blind in one eye before they could get a costly new drug to save the other eye.

Obviously, when you have a set number of doctors and medical providers and you increase the number of covered patients, you must ration the amount of care you provide. While your goal is saving money.

The Phony Unemployment Rate

The unemployment rate being fed us by the government is much higher than it’s being stated.

The Labor Department has admitted it over-counted the number of jobs in 2009 by 1.4 million when they used a computer program to erroneously extrapolate new companies being created each month and then guessed the number of jobs that should have been created.

This year, the Labor Department has over-counted at least 550,000 jobs under its dubious birth/death series.

The economy this year created virtually no jobs, The Obama administration has been mentioning 600,000, but they’re phantom jobs.

Jobs are Stymied by Social Tax Policy

The whole panoply of programs to pay people to buy cars, houses, pay off mortgages, insulate their homes and place solar paneling on their homes, with money taken from taxpayers and has not worked.

We as the taxpayers are paying for this experiment in dubious, socialist, politically-inspired attempts at achieving prosperity, Not all by ourselves, But with our children and their children and their children in future generations,

In terms of taxation and inflation to come.

Yet our current deep recession and lack of jobs remain with us.

Old Patents Can Be Dangerous

After your patents expire, be careful not to advertise your ownership. You can be sued by enterprising lawyers . And monetary penalties are high per infraction.

Moreover, there can be a penalty for each unit of sale you make where that expired patent has been advertised.

This is particularly dangerous if you are a manufacturer.of multi-unit items. So look around the shelves of the products you display..

What Differentiates Good or Bad Businessmen?

Top-level business executives all have pat answers. These are pretty much all the same. They want the best for customers. They want the best for employees. There are about ten values all CEOs hold important. Repeating them so that they can be memorized by aspiring executives would be foolish. That’s because these stated aims are simplistic.

In my experience, I find there are a few that are so basic they do not require college training or an MBA.

Basically, a top executive always has to be able to focus. One has to set a goal and stick to it. Not having a firm plan with a business budget that guides you and has you adapt to its requirements is a business and executive killer.

I also found that an executive has to be able to micromanage a business while refusing to micromanage, especially as the business grows. (Mull this over!!)

Think of this choice bit of advice. You won’t get it in graduate school.

Questionable Expert Advice on Business

Experts on business management techniques, along with new, bright management ideas, change every few years.

They should be looked at with a wary eye.

Most management techniques become fads as marketing ploys, something wet-behind-the-ears management types dream up to open doors for new business.

Their customers are business executives who are looking for something to impress their bosses. Or their shareholders. They may also feel they are buying insurance against potential stockholder arguments, when they use such new “strategic” ideas.

New Business is Essential For Jobs

New Business ventures are always important for getting an economy out of deep recessions. Unfortunately, the development of enterprise has now been lagging behind this experience.

According to the Bureau of Labor Statistics, in their first 90 days, new businesses produced about 14% of hiring between 1993 and 2008

Small business formation today is in a major funk. Furthermore, Business is afraid to hire because of the increasingly oppressive tax picture. Add to this the constant barrage of threats from Washington of health insurance added cost, and higher federal and state regulations.

Left-leaning politicians talk jobs. The only ones they like.revolve around government and the big union varieties. Small business is not in their vocabulary.

A Sports Figure Salary Czar

Major league sports teams have government-subsidized stadiums. But their high-priced player salaries are not regulated as they are in government-hated industry.

Almost every major league ball club has been given subsidies in some way to build ball parks with funds which have come from local or state taxpayers. Much of that money can be traced to federal stimulus funds.

So, a logical interpretation of law by politicians overlooking those funds would declare that salary controls of executives earning a few million a year should also apply to star athletes.

Example: One player having a poor year got about $30 million. The short-sighted Obama Administration could have 30 top-level execs for that money, producing jobs in a depressed economy.

Why Have Unionized Government Workers?

Why should city, state and federal government workers be unionized? They have the right to join whatever fraternities or organizations they like under the constitution, but why must they be able to join a union to fight their government?

I can see unions in private industry, to seek better working conditions, and redress grievances, better salaries and other benefits.

Government employees can vote politicians out. Political parties on the left supposedly are there for many of those workers. We hear their petitions every day. Union redress against government should only be political.

The chief weapon of unionism today is the way they wield their power in government, in addition to the power of the voting booth. Private industry unionism is weak because most workers have not chosen them. Union power today is in the form of government programs.

The High Cost of Government

Each dollar taken from taxpayers, and sent to Washington, is then returned to the beneficiary at a loss of about 70 cents. That estimated reduction is in the form of salaries, rent and other expenses.

If this is so, why can those who believe in strong central government make any case that Uncle Sam can do a better job with a tax dollar than an individual who earned that dollar could do, on his or her own?

Individuals cannot easily defend or police themselves. But there are many functions the government has taken over, or wants taken over, that would be better accomplished privately, or locally, nearer to home..

Like health care?

Long Term Economic Forecasting

Economic forecasting is most difficult. Business conditions are in constant flux. And it’s tough to know what is going to happen domestically because of politics that change, sometimes drastically, every two years in the House of Representatives and six years in the Senate.

You also have complex interrelationships across countries, some very volatile in their political makeups. Any one country, in any one region, can materially affect the forecast for what we expect for the U.S.

Short-term changes are certainly far more difficult. Entire global scenarios change overnight!

Nevertheless, much planning and budgeting that our government relies on, that affects business, is based on such economic forecasting. No wonder government deficit estimates are usually far off Particularly, when politicians fib to fit their promises to reality.

Commercial Real Estate Market

Commercial real estate booms and busts are generally affected by the construction of too much space. This cycle’s problems have arisen from the deep recession seeping into commercial property.

The financial lending crisis and not overbuilding as in the past, added to poor economic activity and a weak job market, are the problems.

The weak economy has been driving down rents. Many property owners are finding it difficult to refinance short-term financing when due. Property values consequently moved down, as in residential housing.

But many larger commercial owners, such as publicly owned real estate investment trusts (REITs), did better. Especially those with substantial equity and access to public funds. It was an opportunity for them to take advantage of marked-down, available assets at lower cost.

In what appears to be the turnaround, commercial rentals now are beginning to stabilize and move up.

Economies Grow with New Small Businesses

Net job gains over the past three decades have come from companies less than five years old. About two thirds of new jobs have come from this group.

This is not currently happening, despite the disastrous spending of the Obama Administration. Because nothing is being done to create the environment for small business to prosper.

On the contrary, everything that impedes the small business operator has been created in the past years. Higher minimum wages on unskilled labor, and looming higher income taxes.

Just as importantly, there are constant anti-business diatribes from Washington which scare would-be entrepreneurs.

MBA Program Shortcomings

In previous blogs I mentioned a number of ways how and why graduate schools are revamping their MBA courses.

Some may be doing it for sound critical needs, while others may have cynical reasons to simply attract students.

Education should not have to do with regulation. We are overly regulated. And the Administration wants even more of the same. We need MBA students who can learn more about regulation in practical terms.

I have said many times before, from my own graduate school and executive work experience: The public always has the false assumption that government bureaucrats, and that includes the Treasury Secretary and the Federal Reserve head, are really completely on top of it all. They know more than 99.9% of the public, but that does not mean they are aware of practical business that their job involves.

Global Warming Research

Much global warming research has actually been suspect for some time, because the mathematical models used are deficient. There is not sufficient computer capability, nor is there enough accurate data for necessary input.

Though warming proof is poor, those who believe in global warming theory insist that the information they have has to be considered in its entirety, no matter the cost of implementation of what data they have.

All of which can be economically devastating.

However, research is being done to see if some of the major legitimate climatic defects can be corrected quickly and at lower cost. Such as the use of an sulphur dioxide in-the-upper-atmosphere approach at minimal cost.

But the industry built around global warming pessimism does not want to hear of such smaller but valued corrective measures, if any are truly necessary. And much of the data has been found to have been falsified or “adapted.”

There is simply too much politics involved. Global warming controls translate into government controls, the chief handle being the use of the taxation tool.

The Ethanol Fiasco

Climate change enthusiasts have problems with data from different research sources, whether it be poor interpretation of science or scandal involving basic research.

The noted journal Science, in a study of biofuel emissions, found an error in the way climate-change studies are being made. It discovered that ethanol produces the same amount of greenhouse gas as fossil fuels. or more such gas per unit of energy. Yet ethanol was always considered to be better than oil or gas as a fuel, in this regard,

Also, ethanol displaces and raises the cost of a food product. That was always a negative. Along with the fact that it’s a relatively poor source of energy, compared to conventional fuels.

Pure politics has dressed up to appear an environmental bonanza.

The unintended consequence will be that land will be used for wrong purposes, and rain forests will be converted for the production of this poor energy substitute.

MBA Program Needed Tweaking

I have in the past pointed out how and why graduate schools are revamping their MBA courses. And that some may be doing so for critical needs, as well as cynical purposes.

And that some on the Left make ethics the sole instruction issue when ethics should be taught no matter the specific course. Capitalism, after all, is not the only economic system beset by occasional problems brought on by poor ethical standards.

There are valid areas where MBA courses should be tweaked. The use of mathematical models and their shortcomings; liquidity in pricing securities; global interdependence within the world economy; the problem of over-regulation by government’ and so on.